Legal Services Bill [HL]

House of Commons

Session 2006 - 07
Internet Publications
Other Bills before Parliament

Legal Services Bill [HL]

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 2 — The Administration of Justice Act 1985 (c. 61)
278

substitute—
“4A   (1)
This paragraph applies where rules made under section 33A(1) of
the 1974 Act are applied—
(a)
to recognised bodies in accordance with section 9(2)(f) of
this Act, or
5
(b)
to managers or employees of such bodies in accordance
with section 9(2)(fb) of this Act.
      (2)
The Society may disclose information about the accounts of a
recognised body, or a manager or employee of a recognised body,
obtained in pursuance of such rules for use—
10
(a)
in investigating the possible commission of an offence by
the body or any of its managers or employees, and
(b)
in connection with any prosecution of the body or any of
its managers or employees consequent on the
investigation.”
15
92
For paragraph 5 of that Schedule (accountants’ reports) substitute—
“5
Where rules made under section 34 of the 1974 Act are applied to
recognised bodies in accordance with section 9(2)(f), section 34(9)
and (10) of that Act apply in relation to a recognised body as they
apply in relation to a solicitor.”
20
93
After that paragraph insert—
“5A
Where rules made under section 34 of the 1974 Act are applied to
managers or employees of recognised bodies in accordance with
section 9(2)(fb), section 34(9) and (10) of that Act apply in relation
to a manager or employee to which the rules are applied as they
25
apply in relation to a solicitor.”
94
For paragraph 6 of that Schedule (compensation fund) substitute—
“6    (1)
Section 36 of the 1974 Act applies in relation to recognised bodies
as if for paragraphs (a) and (b) of subsection (1) there were
substituted—
30
“(a)
an act or omission of a recognised body or former recognised
body;
(b)
an act or omission of a manager or employee, or former
manager or employee, of a recognised body or former
recognised body;”.
35
      (2)
Section 36A(2) and (3) of the 1974 Act applies in relation to
recognised bodies as it applies in relation to solicitors.”
95
In paragraph 7 of that Schedule (solicitor who is justice of the peace not to
act in certain proceedings) for “an officer” (in both places) substitute “a
manager”.
40
96
In paragraph 9 of that Schedule (restriction on employment of person struck
off roll or suspended)—
(a)
the existing provision becomes sub-paragraph (1) and in that sub-
paragraph after “recognised body” insert “(and any manager or
employee of it)”, and
45

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 2 — The Administration of Justice Act 1985 (c. 61)
279

(b)
after that sub-paragraph insert—
    “(2)
No recognised body (or manager or employee of such a
body) may, except in accordance with a written permission
granted by the Society under this paragraph, permit a
person to whom sub-paragraph (3) applies to—
5
(a)
be a manager of the body, or
(b)
have an interest in the body;

and for this purpose a person has an interest in the body if
he has an interest in the body within the meaning of Part 5
of the Legal Services Act 2007 (see sections 72 and 109 of
10
that Act).
      (3)
This sub-paragraph applies to a person who to the
knowledge of the recognised body (or, as the case may be,
the manager or employee) is a person—
(a)
who is disqualified from practising as a solicitor by
15
reason of one of the facts mentioned in section
41(1)(a), (b) or (c) of the 1974 Act (name struck off
the roll, suspension etc), or
(b)
in respect of whom there is a direction in force
under section 47(2)(g) of that Act (prohibition on
20
restoration to roll).
      (4)
Permission granted for the purposes of sub-paragraph (2)
may be granted for such period and subject to such
conditions as the Society thinks fit.
      (5)
A person aggrieved by the refusal of the Society to grant
25
permission under sub-paragraph (4), or by any conditions
attached by the Society to the grant of any such permission
may appeal to the High Court which may—
(a)
confirm the refusal or the conditions, as the case
may be, or
30
(b)
grant a permission under this paragraph for such
period and subject to such conditions as it thinks
fit.
      (6)
In relation to an appeal under sub-paragraph (5) the High
Court may make such order as it thinks fit as to payment
35
of costs.
      (7)
The decision of the High Court on an appeal under sub-
paragraph (5) is final.”
97
In paragraph 10 of that Schedule (failure to disclose striking off or
suspension)—
40
(a)
the existing paragraph becomes sub-paragraph (1) of that paragraph,
(b)
in that sub-paragraph after “recognised body” insert “(or any
manager or employee of such a body)”, and
(c)
after that sub-paragraph insert—
    “(2)
It is an offence for a person (“P”) to whom sub-paragraph
45
(3) applies—
(a)
to seek or accept from any person an interest in a
recognised body, without previously informing

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 2 — The Administration of Justice Act 1985 (c. 61)
280

that person (and, if different, the recognised body)
that P is a person to whom that sub-paragraph
applies, or
(b)
to seek or accept a position as a manager of a
recognised body, without previously informing
5
that body that P is such a person.
      (3)
This sub-paragraph applies to a person—
(a)
who is disqualified from practising as a solicitor by
reason of one of the facts mentioned in section
41(1)(a), (b) or (c) of the 1974 Act (name struck off
10
the roll, suspension etc), or
(b)
in respect of whom there is a direction in force
under section 47(2)(g) of that Act (prohibition on
restoration to roll).
      (4)
A person guilty of an offence under sub-paragraph (2) is
15
liable on summary conviction to a fine not exceeding level
3 on the standard scale.
      (5)
Subsection (2) of section 42 of the 1974 Act applies in
relation to an offence under sub-paragraph (2) as it applies
in relation to an offence under that section.
20
      (6)
For the purposes of sub-paragraph (2)(a) a person seeks or
accepts an interest in a recognised body if the person seeks
or accepts an interest which if it were obtained by the
person would result in the person having an interest in that
body within the meaning of Part 5 of the Legal Services Act
25
2007 (see sections 72 and 109 of that Act).”
98
Omit paragraph 11 of that Schedule (control of employment of persons
convicted of offences of dishonesty and certain other persons).
99
Omit paragraph 12 of that Schedule (offences in connection with orders
under section 43(2) of the 1974 Act).
30
100
Omit paragraph 13 of that Schedule (redress for inadequate professional
services).
101
For paragraph 14 of that Schedule (examination of files) substitute—
“Information about suitability for recognition
14    (1)
The Society may give a notice under this paragraph if it is satisfied
35
that it is necessary to do so for the purpose of investigating
whether a recognised body continues to be suitable to be
recognised under section 9.
      (2)
A notice under this paragraph is a notice which requires a person
within sub-paragraph (3)—
40
(a)
to provide information, or information of a description,
specified in the notice, or
(b)
to produce documents, or documents of a description,
specified in the notice.
      (3)
The persons are—
45

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 2 — The Administration of Justice Act 1985 (c. 61)
281

(a)
the recognised body;
(b)
an employee or manager of the recognised body;
(c)
a person who has an interest in the recognised body
(within the meaning of the Legal Services Act 2007 (see
sections 72 and 109 of that Act)).
5
      (4)
For the purposes of this paragraph, section 44B(4) to (7) of the 1974
Act applies—
(a)
in relation to a notice under this paragraph as if it were a
notice under section 44B of that Act, and
(b)
in relation to a person given a notice under this paragraph
10
as if that person were a person given a notice under that
section,

and references in subsections (6) and (7) of that section to powers
conferred by that section are to be read as references to powers
conferred by this paragraph.
15
      (5)
Where powers conferred by Part 2 of Schedule 1 to the 1974 Act are
exercisable in relation to a person within paragraph (a), (b) or (c)
of sub-paragraph (3), they continue to be so exercisable after the
person has ceased to be a person within the paragraph in question.
      (6)
Section 44BA of the 1974 Act (power to require explanation of
20
document or information) applies in relation to a notice under this
paragraph and the person to whom such a notice is given as it
applies in relation to a notice under section 44B of the 1974 Act and
the person to whom such a notice is given.
      (7)
Subsection (1) of section 44BC of that Act (falsification of
25
documents etc) applies in relation to an investigation of the kind
mentioned in sub-paragraph (1) as it applies in relation to the
investigations mentioned in that subsection, and subsections (2),
(4) and (5) of that section apply accordingly.
      (8)
Subsection (3) of that section (provision of false information etc)
30
applies in relation to a requirement imposed under this paragraph
as it applies in relation to a requirement imposed by section 44B of
that Act, and subsections (4) and (5) of that section apply
accordingly.”
102
For paragraph 14A of that Schedule (payment of costs of investigations)
35
substitute—
“Power to charge for costs of investigation
14A   (1)
The Society may make regulations prescribing charges to be paid
to the Society by recognised bodies who are the subject of a
discipline investigation.
40
      (2)
A discipline investigation is an investigation carried out by the
Society into a failure or apprehended failure by a recognised body
to comply with any requirement imposed by or by virtue of this
Act or any rules applicable to it by virtue of section 9.
      (3)
Regulations under this paragraph may—
45
(a)
make different provision for different cases or purposes;

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 2 — The Administration of Justice Act 1985 (c. 61)
282

(b)
provide for the whole or part of a charge payable under the
regulations to be repaid in such circumstances as may be
prescribed by the regulations.
      (4)
Any charge which a recognised body is required to pay under
regulations under this paragraph is recoverable by the Society as
5
a debt due to the Society from the recognised body.
      (5)
This paragraph applies in relation to a manager or employee of a
recognised body as it applies in relation to a recognised body.”
103
After that paragraph insert—
“Disciplinary powers of the Society
10
14B   (1)
This paragraph applies where the Society is satisfied that a
recognised body, or a manager or employee of a recognised body,
has failed to comply with a requirement imposed by or by virtue
of this Act or any rules applicable to that person by virtue of
section 9 of this Act.
15
      (2)
The Society may do one or both of the following—
(a)
give the person a written rebuke;
(b)
direct the person to pay a penalty not exceeding £2,000.
      (3)
The Society may publish details of any action it has taken under
sub-paragraph (2)(a) or (b), if it considers it to be in the public
20
interest to do so.
      (4)
Where the Society takes action against a person under sub-
paragraph (2)(b), or decides to publish under sub-paragraph (3)
details of such action under sub-paragraph (2)(a) or (b), it must
notify the person in writing that it has done so.
25
      (5)
A penalty imposed under sub-paragraph (2)(b) does not become
payable until—
(a)
the end of the period during which an appeal against the
decision to impose the penalty, or the amount of the
penalty, may be made under paragraph 14C, or
30
(b)
if such an appeal is made, such time as it is determined or
withdrawn.
      (6)
The Society may not publish under sub-paragraph (3) details of
any action under sub-paragraph (2)(a) or (b)—
(a)
during the period within which an appeal against—
35
(i)
the decision to take the action,
(ii)
in the case of action under sub-paragraph (2)(b),
the amount of the penalty, or
(iii)
the decision to publish the details,

may be made under paragraph 14C, or
40
(b)
if such an appeal has been made, until such time as it is
determined or withdrawn.
      (7)
The Society must make rules—
(a)
prescribing the circumstances in which the Society may
decide to take action under sub-paragraph (2)(a) or (b);
45

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 2 — The Administration of Justice Act 1985 (c. 61)
283

(b)
about the practice and procedure to be followed by the
Society in relation to such action;
(c)
governing the publication under sub-paragraph (3) of
details of action taken under sub-paragraph (2)(a) or (b);

and the Society may make such other rules in connection with the
5
exercise of its powers under this paragraph as it considers
appropriate.
      (8)
Before making rules under sub-paragraph (7), the Society must
consult the Tribunal.
      (9)
A penalty under this paragraph may be recovered as a debt due to
10
the Society, and is to be forfeited to Her Majesty.
     (10)
The Lord Chancellor may, by order, amend paragraph (b) of sub-
paragraph (2) so as to substitute for the amount for the time being
specified in that paragraph such other amount as may be specified
in the order.
15
     (11)
Before making an order under sub-paragraph (10), the Lord
Chancellor must consult the Society.
     (12)
An order under sub-paragraph (10) is to be made by statutory
instrument subject to annulment in pursuance of a resolution of
either House of Parliament.
20
     (13)
This paragraph is without prejudice to any power conferred on the
Society, or any other person, to make an application or complaint
to the Tribunal.
14C   (1)
A person may appeal against—
(a)
a decision by the Society to rebuke that person under
25
paragraph 14B(2)(a) if a decision is also made to publish
details of the rebuke;
(b)
a decision by the Society to impose a penalty on that
person under paragraph 14B(2)(b) or the amount of that
penalty;
30
(c)
a decision by the Society to publish under paragraph
14B(3) details of any action taken against that person under
paragraph 14B(2)(a) or (b).
      (2)
Subsections (9)(b), (10)(a) and (b), (11) and (12) of section 46 of the
1974 Act (Tribunal rules about procedure for hearings etc) apply
35
in relation to appeals under this paragraph as they apply in
relation to applications or complaints, except that subsection (11)
of that section is to be read as if for “the applicant” to
“application)” there were substituted “any party to the appeal”.
      (3)
Rules under section 46(9)(b) of the 1974 Act may, in particular,
40
make provision about the period during which an appeal under
this paragraph may be made.
      (4)
On an appeal under this paragraph, the Tribunal has power to
make an order which—
(a)
affirms the decision of the Society;
45
(b)
revokes the decision of the Society;

Legal Services Bill [HL]
Schedule 16 — The Law Society, solicitors, recognised bodies and foreign lawyers
Part 2 — The Administration of Justice Act 1985 (c. 61)
284

(c)
in the case of a penalty imposed under paragraph
14B(2)(b), varies the amount of the penalty;
(d)
in the case of a recognised body, contains provision for any
of the matters mentioned in paragraph 18(2);
(e)
in the case of a manager or employee of a recognised body,
5
contains provision for any of the matters mentioned in
paragraph 18A(2);
(f)
makes such provision as the Tribunal thinks fit as to
payment of costs.
      (5)
Where, by virtue of sub-paragraph (4)(e), an order contains
10
provision for any of the matters mentioned in sub-paragraph (2)(c)
of paragraph 18A, sub-paragraphs (5) and (6) of that paragraph
apply as if the order had been made under sub-paragraph (2)(c) of
that paragraph.
      (6)
An appeal from the Tribunal shall lie to the High Court, at the
15
instance of the Society or the person in respect of whom the order
of the Tribunal was made.
      (7)
The High Court shall have power to make such order on an appeal
under this paragraph as it may think fit.
      (8)
Any decision of the High Court on an appeal under this section
20
shall be final.
      (9)
This paragraph is without prejudice to any power conferred on the
Tribunal in connection with an application or complaint made to
it.”
104
In paragraph 16 of that Schedule (complaints to Tribunal with respect to
25
recognised bodies)—
(a)
in sub-paragraph (1), in paragraph (a) omit “in the United
Kingdom”,
(b)
in paragraph (b) of that sub-paragraph for “section 34 of the 1974
Act” substitute “any requirement imposed by or by virtue of this
30
Act”,
(c)
for paragraph (c) of that sub-paragraph substitute—
“(c)
a complaint that the body has acted in
contravention of section 41 of the 1974 Act or
paragraph 9(2) of this Schedule or of any
35
conditions subject to which a permission has been
granted under section 41 of that Act or that
paragraph of this Schedule; or”, and
(d)
after that sub-paragraph insert—
   “(1A)
The Tribunal shall have jurisdiction to hear and determine
40
any of the following complaints made to it under this
paragraph with respect to a manager or employee of a
recognised body (“the relevant person”)—
(a)
a complaint that the relevant person has been
convicted by any court of a criminal offence which
45
renders that person unsuitable to be a manager or
employee (or both) of a recognised body;
(b)
a complaint that the relevant person has failed to
comply with any requirement imposed by or by